Eurozone PMI Weighs Down on the Euro

The Lebanese Pound (LP) steadied this week within the range of $/LP 1,514 – 1,514.5 against the dollar, with a mid-price of $/LP 1,514.25.

Lebanese Forex Market

The peg continues to be supported by the Central Bank’s solid foreign assets, which reached $38.9B by the end of February 2019.

The dollarization ratio of private sector deposits rose from 68.44% in January 2018 to 70.87% in January 2019.

The Euro depreciated against the dollar-pegged LP, ending the week at €/LBP 1,698.76, compared to last week’s €/LBP 1,704.15

In its turn, the Nominal Effective Exchange Rate (NEER) of the LBP added 0.07% over the week to 117.93 points.

International Forex Market

The Euro tumbled by 0.32% against the US dollar over the week ending March 22, 2019. The currency pair went from last week’s €/USD 1.1304 to €/USD 1.1269. This is largely attributed to the release of IHS Markit’s manufacturing euro zone composite Purchasing Manager’s Index (PMI) which dropped to 47.7 in March, compared to 49.4 in February, and slipping below the market expectations of 49.5. In details, the IHS Markit PMI for Germany’s factory sector slumped to 44.7 in March, from 47.6 in February. Meanwhile, the IHS Markit composite PMI for France dropped to 48.7 in March from 50.4 the previous month, well below the 50.7 forecast by economists in a Reuters poll. The released data signaled economic slowdowns in two of the largest EU economies over the week, which shook investors and thus, the Euro.


Accordingly, gold prices rose over the week to $1,310.56/ounce by March 22nd, compared to last week’s $1,304/ounce.

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